(A) The area of the triangle formed by the demand curve, the price axis and the
equilibrium price line.
(B) the area between the average revenue and marginal revenue curves.
(C) the difference between the maximum price the consumer is willing to pay for a good
(vertical-intercept of demand curve) and the minimum price the producer is willing to
sell at (vertical intercept of supply curve).
(D) A and C.
Category: Economics Mcqs
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The law of diminishing marginal utility states that?
(A) total satisfaction will decrease as more units of the good are consumed.
(B) the satisfaction derived from each additional unit of a good consumed will
decrease.
(C) total utility will become negative.
(D) Both the first and third option.
Economists use the term marginal utility to mean?
(A) additional satisfaction gained divided by additional cost of the last unit.
(B) additional satisfaction gained by the consumption of one more unit of a good.
(C) total satisfaction gained when consuming a given number of units.
(D) the process of comparing marginal units of all goods which could be purchased.
Economists use the term utility to mean?
(A) the value of a product before it has been advertised.
(B) the satisfaction a consumer obtains from a good or service.
(C) any characteristic of a good or service which cannot be measured.
(D) the contribution a good or service makes to social welfare.
When firms advertise their product, they are trying to:
(A) Shift the demand curve to the right
(B) Make the demand curve steeper
(C) Make demand for the product more inelastic
(D) All of the above
If a 5% increase in price causes no change in total revenue, this means:
(A) demand is price inelastic
(B) demand is price elastic
(C) demand is unit elastic
(D) demand is perfectly inelastic
If total revenue rises by 10% when price increases by 5%, this means:
(A) demand is price inelastic
(B) demand is price elastic
(C) demand is unit elastic
(D) demand is perfectly inelastic
ncome elasticity of demand is the % change in quantity demanded divided by the % change in income. Which type of goods have negative income elasticity of demand?
(A) Inferior goods.
(B) Normal goods.
(C) Substitute goods.
(D) Complementary goods.